The federal Paycheck Protection Program, which offers forgivable loans to businesses affected by coronavirus, on Monday began allowing seasonal businesses to calculate their loan amounts based on payroll expenses from last summer.
The change is expected to help businesses such as those related to fishing and summer tourism.
U.S. Sen. Susan Collins’ office issued a news release Monday saying the U.S. Treasury Department has issued a new rule that will provide greater flexibility to seasonal businesses applying for forgivable loans.
Previously, the maximum size of a seasonal employer’s Paycheck Protection Program loan was calculated by using the applicant’s average monthly payroll costs during the 12-week period beginning Feb. 15 or March 1, and ending June 30.
Many small employers in Maine, however, have busy seasons that occur during the summer, Collins’ office said. The new rule released by the Treasury will give seasonal employers the option to use any consecutive 12-week period between May 1, 2019, and September 15, 2019, to determine their maximum loan amount when they apply, it said.
“Maine hosts tens of millions of visitors each year, and many of them arrive during the busy summer season,” Collins said in the release. “This new rule will give Maine seasonal small businesses more flexibility in calculating their maximum loan size when they apply for the program. I pressed Treasury to help ensure that Maine’s summer seasonal employers, who have already seen bookings canceled as a result of the COVID-19 pandemic, are able to select the payroll window that best represents their business needs.”
To date, nearly 17,000 small employers in Maine have been approved for $2.24 billion in forgivable loans, providing paychecks for approximately 180,000 employees, according to Collins’ office. The average loan amount in Maine is $134,000, consistent with small businesses averaging 12 employees.
Monday morning, U.S. Small Business Administration resumed accepting Paycheck Protection Program loan applications now that legislation to increase funding for the program by $320 billion has been signed into law.
Correction: This story was updated at 3 p.m. Tuesday April 28, 2020 to correct that loan amounts are based on payroll expenses.
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